Civil Penalties

Jack Danielson
National Highway Traffic Safety Administration
12 July 2017

[Federal Register Volume 82, Number 132 (Wednesday, July 12, 2017)]
[Rules and Regulations]
[Pages 32139-32140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14526]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-2016-0136]
RIN 2127-AL82


Civil Penalties

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation (DOT).

ACTION: Final rule; delay of effective date.

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SUMMARY: NHTSA is delaying the effective date of the final rule 
entitled ``Civil Penalties,'' published in the Federal Register on 
December 28, 2016, because NHTSA is reconsidering the appropriate level 
for CAFE civil penalties.

DATES: As of July 7, 2017, the effective date of the final rule 
published in the Federal Register on December 28, 2016, at 81 FR 95489, 
is delayed indefinitely pending reconsideration.

FOR FURTHER INFORMATION CONTACT: Rebecca Schade, Office of Chief 
Counsel, at (202) 366-2992.

SUPPLEMENTARY INFORMATION: On July 5, 2016, NHTSA published an interim 
final rule updating the maximum civil penalty amounts for violations of 
statutes and regulations administered by NHTSA, pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 
(Inflation Adjustment Act). The penalty for exceeding an applicable 
Corporate Average Fuel Economy (CAFE) standard was among the penalties 
adjusted for inflation in the interim final rule. In accordance with 
the Inflation Adjustment Act and guidance on calculating the 
inflationary adjustment mandated by the Act issued by the Office of 
Management and Budget, NHTSA increased the civil penalty for failing to 
meet an applicable CAFE standard from $5.50 per tenth of a mile per 
gallon (mpg) to $14 per tenth of an mpg.
    The Auto Alliance and Global Automakers jointly petitioned NHTSA 
for reconsideration of the interim final rule regarding the 
inflationary adjustment of CAFE non-compliance penalties (hereafter, 
the Alliance and Global petition will be referred to as the ``Industry 
Petition'') \1\ on August 1, 2016. The Industry Petition argued that 
NHTSA used the wrong base year to calculate the inflationary adjustment 
to the CAFE civil penalty and raised concerns about applying the 
adjusted civil penalty retroactively. The Industry Petition also argued 
that in the event that NHTSA chose not to adopt the base year suggested 
in the petition, NHTSA should seek comment on whether NHTSA should 
adopt a lower penalty level than the one in the interim final rule 
based on ``negative economic impacts,'' as permitted by the Inflation 
Adjustment Act.
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    \1\ Jaguar Land Rover North America, LLC also filed a petition 
for reconsideration in response to the July 5, 2016 interim final 
rule raising the same concerns as those raised in the Industry 
Petition. Both petitions can be found in Docket No. NHTSA-2016-0075, 
accessible via www.regulations.gov.
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    On December 28, 2016, NHTSA published a final rule in response to 
the Industry Petition.\2\ To address concerns raised in the Industry 
Petition about applying the adjusted penalty retroactively, NHTSA 
delayed application of the $14 per tenth of an mpg penalty until the 
2019 model year, which begins in October 2018 for most manufacturers. 
The final rule did not address the other points raised in the Industry 
Petition.
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    \2\ 81 FR 95489.
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    The December 28, 2016 final rule is not yet effective and would 
currently become effective on July 10, 2017.\3\
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    \3\ 82 FR 8694 (Jan. 30, 2017); 82 FR 15302 (Mar. 28, 2017); 82 
FR 29009 (June 27, 2017).
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    NHTSA is now reconsidering the final rule because the final rule 
did not give adequate consideration to all of the relevant issues, 
including the potential economic consequences of increasing CAFE 
penalties by potentially $1 billion per year, as estimated in the 
Industry Petition. Thus, in a separate document

[[Page 32140]]

published in this Federal Register, NHTSA is seeking comment on whether 
$14 per tenth of an mpg is the appropriate penalty level for civil 
penalties for violations of CAFE standards given the requirements of 
the Inflation Adjustment Act and the Energy Policy and Conservation Act 
(EPCA) of 1975, which authorizes civil penalties for violations of CAFE 
standards.\4\ Because NHTSA is reconsidering the final rule, NHTSA is 
delaying the effective date pending reconsideration.
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    \4\ NHTSA incorporates the discussions in the document seeking 
comment on the appropriate CAFE civil penalties level by reference.
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    There is good cause to implement this delay without notice and 
comment under 5 U.S.C. 553(b)(B) and 553(d)(3) because those procedures 
are impracticable, unnecessary, and contrary to the public interest in 
these circumstances, where the effective date of the rule is imminent. 
Moreover, the agency is, through a separate document, already seeking 
out public comments on the underlying issues, which may be extensive, 
and additional time will be required to thoughtfully consider and 
address those comments before deciding on the appropriate course of 
regulatory action. A delay in the effective date is therefore 
consistent with NHTSA's statutory authority to administer the CAFE 
standards program and its inherent authority to do so efficiently and 
in the public interest. In addition, no party will be harmed by the 
delay in the effective date of the rule. On the contrary, the rule does 
not increase CAFE penalties before Model Year 2019, and therefore, the 
delay will not affect the civil penalty amounts assessed against any 
manufacturer for violating a CAFE standard prior to the 2019 model year 
at the earliest, i.e., until sometime in 2020. Therefore, the increased 
penalty rate set forth in the rule would not be applied for current 
violations, so there is no immediate, concrete impact from the delay.

    Authority: Pub. L. 101-410, Pub. L. 104-134, Pub. L. 109-59, 
Pub. L. 114-74, Pub L. 114-94, 49 U.S.C. 32902 and 32912; delegation 
of authority at 49 CFR 1.81, 1.95.

Jack Danielson,
Acting Deputy Administrator.
[FR Doc. 2017-14526 Filed 7-7-17; 11:15 am]
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